Editorial: State Senate gets drive toward a graduated income tax off to a rocky start

Daily Herald Editorial Board

May 2, 2019 8:15 am

The Illinois Senate approved a measure Wednesday that could lead to creation of a graduated income tax structure.Associated Press File Photo

Democrats who want Illinois to move to a graduated income tax in 2020 will do well to remember that the campaign to persuade voters will turn not on a complex series of tax brackets but on one simple concept: trust.

In that regard, state senators did their movement no favors Wednesday when, along strict party lines, they voted to put a constitutional amendment on the November 2020 ballot, then almost immediately approved a tax schedule for a series of income levels that increases taxes from the schedule Gov. J.B. Pritzker, the proposal's driving force, has been promoting for weeks.

Since even before Pritzker won election last November, opponents to a graduated income tax have decried the change as a grand "bait-and-switch" scheme in which lawmakers will get voters to free them from the yoke of a constitutionally mandated flat tax, then run rampant adjusting a graduated income tax schedule however the mood suits them to meet ever-increasing spending goals.

On Wednesday, senators demonstrated that not only is that a legitimate fear but they're willing to do the switching even before the bait has been taken.

True, the complaint about lawmakers running amok with taxes under a graduated system ignores the fact that they could just as easily run amok with the existing flat tax. And, true, the changes approved Wednesday were not comprehensive; they accounted for only a small fraction of a percentage point in the middle to upper regions of the income scale. But, let's be real, lawmakers have been playing fast and loose with the flat tax since installing a "temporary" increase in 2011, letting it expire in 2014, then hiking it again in 2017, this time to 4.95% and permanently.

And, the hit in the new schedule does push the highest tax burden ever closer to the middle range of income -- requiring single filers earning $350,000 a year to pay the same 7.85% that joint filers earning up to $1 million will pay and single filers earning $750,000 to pay the same 7.99% that $1 million joint-filing earners face and this on all their income, not adjusted according to the rates at each lower tax bracket. Pritzker's plan maxed out the tax rate for all filers at $1 million.

And the broader point, on which opponents seized immediately, is that the rates already are being changed to bring in more revenue, making lawmakers appear all but indifferent to the fears and misgivings of taxpayers.

The Senate actions also added promises of a property tax rate freeze and elimination of the estate tax if the constitutional amendment passes. But, given the circumstances, which do these promises sound more like, an adjustment to achieve tax fairness or a cynical, unreliable bribe? We're guessing not too many Illinoisans, whatever their opinions of a graduated income tax, tilt toward the magnanimity of lawmakers.

The Senate bills now have to go to the House. Assuming they pass muster there, Pritzker has already shown his support. Then, lawmakers will have a year and a half to persuade taxpayers they can be trusted with a new, more flexible process for taxing income.

With a start like this, they're going to have their work cut out for them.